U.S. Supreme Court Issues Two Key Title VII Rulings

On June 24, 2013, the Supreme Court of the United States issued two highly-anticipated decisions. In Vance v. Ball State University, the justices considered whether the “supervisor” liability rule established by Supreme Court precedent applies to harassment by employees whom the employer vests with the authority to direct and oversee a harassment victim’s daily work or whether the rule is limited to those harassers who have the power to “hire, fire, demote, promote, transfer, or discipline” their victim. With Justice Alito writing for the majority in a 5-to-4 decision, the Supreme Court ruled that an employee is a “supervisor” for purposes of vicarious liability under Title VII of the Civil Rights Act of 1964 only if he or she is empowered by the employer to take tangible employment actions against the victim. Vance v. Ball State University, No. 11–556, Supreme Court of the United States (June 24, 2013).

In University of Texas Southwestern Medical Center v. Nassar, the Court considered whether the retaliation provision of Title VII, 42 U.S.C. § 2000e-2(a), requires a plaintiff to prove but-for causation (i.e., that an employer would not have taken an adverse employment action but for an improper motive) or instead requires only proof that the employer had a mixed motive (i.e., that an improper motive was one of multiple reasons for the employment action). In Nassar, with Justice Kennedy writing the majority in another 5-to-4 decision (with the same distribution of justices on each side of the issue), the Supreme Court ruled that Title VII retaliation claims must be proved according to traditional principles of but-for causation, not the lessened causation test stated in §2000e–2(m). University of Texas Southwestern Medical Center v. Nassar, No. 12–484, Supreme Court of the United States (June 24, 2013).

Finally, the Court also agreed to hear arguments in two labor-related cases next term. The Court will consider the president’s recess appointment power and whether employers may agree with unions on such issues as remaining neutral on union organizing.

Vance v. Ball State University

This case was brought by Maetta Vance, who alleged that she was the victim of a racially hostile work environment while employed at Ball State University. The Supreme Court decided to hear the case to clarify the “supervisor” liability rule that it had established in 1998 in Faragher v. City of Boca Raton and Burlington Industries, Inc. v. Ellerth. According to those cases, an employer may be held vicariously liable for harassment under Title VII if the harasser is the plaintiff’s supervisor.

The Court ruled that the Ellerth/Faragher framework presupposes a distinction between supervisors and coworkers in which the ability to make tangible employment decisions is the defining characteristic of supervisors. In so finding, the Court rejected the “expansive,” “nebulous,” and vague definition of “supervisor” found in an Equal Employment Opportunity Commission (EEOC) Enforcement Guidance and ruled that the “ability to direct another employee’s tasks is simply not sufficient” to warrant employer liability. As Justice Alito commented several times in the majority opinion, under the EEOC's definition, “supervisor status would very often be murky” whereas the definition of supervisor adopted by the Court today can be “readily applied” and resolved before trial.

According to Elizabeth S. Washko, managing shareholder of the Nashville office of Ogletree Deakins, “The Supreme Court’s decision in Vance is significant for two key reasons. First, the Supreme Court provided an important clarification of the term ‘supervisor’ for purposes of harassment under Title VII and has limited it to those who have the power to take tangible employment actions—such as hiring, firing, demoting, transferring, and disciplining. A best practice for employers in utilizing this clarification is to ensure that their job descriptions and delineations of job duties match—making it easy to identify true supervisors from those who do not qualify.”

“Second,” Washko continued, “in providing this clarification, the Supreme Court expressly rejected the EEOC’s ‘nebulous’ definition of the term supervisor, which, the Court concluded, injected too much ambiguity into the issue. The Court reinforced the importance—for all parties—of having a clear picture of the field on which they are playing before becoming too entrenched in litigation. This bodes well for future challenges to regulations and opinions issued by the EEOC, the U.S. Department of Labor, and other government agencies, which appear to err against clear standards and in favor of ambiguities that require ‘individualized assessments’ of nearly every conceivable employment decision.”

According to Michael L. Wade, Jr., of counsel, and James B. Spears, Jr., a shareholder in the Charlotte office, who filed an amicus brief on behalf of the National Retail Federation in Vance in support of the employer, “Rejecting the arguments for an almost unlimited and unworkable definition of ‘supervisor’ advanced by the EEOC and the employee, the Supreme Court emphasized the benefits of clarity for employers, courts, and juries in deciding when vicarious liability should or should not be applied in Title VII harassment cases. As a result of this decision, employers now have uniformity and clarity in deciding which of their employees are supervisors in Title VII hostile work environment claims. The Court’s standard provides a good opportunity for employers to evaluate which of their employees have the authority to actually create vicarious liability on behalf of the employer, and thus, which particular employees should be targeted for special training and directions regarding not only their conduct, but also their responsibilities for prevention and appropriate action when harassment occurs.”

According to Dawn M. Knepper, a shareholder in the Orange County office of Ogletree Deakins, “I regularly rely on the Ellerth/Faragher affirmative defense in defending harassment claims and am pleased that the defense has been confirmed for employers. The outcome in this case is favorable, as even the Court states that it should make it easier to address supervisor status and availability of the affirmative defense on summary judgment. The opinion importantly solidifies the need for strong, regular training on a company’s anti-discrimination and harassment policies and the mechanisms for an employee to make a complaint. That training will demonstrate that your company is taking reasonable steps to prevent and correct any harassing behavior.”

University of Texas Southwestern Medical Center v. Nassar

Dr. Naiel Nassar, who is of Middle Eastern descent, was a faculty member at the University of Texas Southwestern Medical Center (UTSW) and a clinician at UTSW-affiliated Parkland Hospital. Nassar filed a constructive discharge and retaliation suit against UTSW and a jury found in his favor. The Fifth Circuit Court of Appeals affirmed, finding that retaliation claims only require a showing that retaliation was a motivating factor for an adverse employment action. The Supreme Court of the United States disagreed.

According to the Court, an employee who alleges retaliation under Title VII must satisfy the but-for causation test, that is, he or she must show that the causal link between the injury and the wrong is so close that the injury would not have occurred but for the act. The lesser causation standard—the so-called mixed-motive standard—that requires employees to show that retaliation was one of the employer’s motives, even if the employer had other, lawful motives that contributed to the employer’s decision is insufficient, the Court ruled, to show liability for a Title VII retaliation claim.

In arriving at this conclusion, the court found instructive its 2009 decision in Gross v. FBL Financial Services, Inc., in which the Court applied the but-for causation standard to a disparate treatment claim brought under the Age Discrimination in Employment Act (ADEA). The Court found that “the lack of any meaningful textual difference between” Title VII’s anti-retaliation provision and the ADEA necessitates the same conclusion in this case, namely that “Title VII retaliation claims require proof that the desire to retaliate was the but-for cause of the challenged employment action.” Recognizing that “retaliation claims are being made with ever-increasing frequency,” the Court noted that a lesser causation standard might “contribute to the filing of frivolous claims, which would siphon resources from efforts by employer[s], administrative agencies, and courts to combat workplace harassment.”

According to Michael W. Fox, a shareholder in the Austin office of Ogletree Deakins, “In Nassar, the Court holds that retaliation claims brought under Title VII must be evaluated using a ‘but for’ not ‘motivating factor’ standard—about which Justice Kennedy, in language that is music to a defendant's ears, bluntly says: 'This, of course, is a lessened causation standard.’ Looking beyond this victory, does today’s decision (coupled with Gross) establish a default standard for all federal employment law statutes? Maybe. Going forward in reviewing other statutes, unless Congress specifically used ‘motivating factor’ or other similar language, ‘but for’ is the likely test.”

According to John F. Martin, a shareholder in the Washington, D.C. office of Ogletree Deakins, “The immediate impact of Nassar is, of course, that Title VII retaliation claims just became a lot harder to prove. The Court expressed alarm at the rising number of retaliation claims, among other things—which Justice Ginsburg’s dissent derided as a tone-deaf zeal to reduce claims without regard to the realities of the workplace.”

“The decision also could affect retaliation claims beyond Title VII,” Martin commented. “The government currently interprets several retaliation statutes as employing the mixed-motive standard, such as the Occupational Safety and Health Act (OSHA) and several environmental statutes. Those statutes contain similar ‘because’ or ‘because of’ wording used in the retaliation provision under Title VII. The Nassar decision followed the logic of its 2009 decision, Gross, and found that the ‘because of’ language in Title VII essentially provides a ‘but for’ causation standard for retaliation claims. After Gross was decided, the U.S. Department of Labor (DOL) declared that the decision did not apply to OSHA and environmental retaliation claims for several reasons, many of which the Court rejected in Nassar. It will be interesting to see how the DOL and other agencies respond to the Nassar decision.”

Noel Canning and UNITE HERE Local 355

The Court also agreed to hear two cases in the 2013-2014 term that will impact employers. The Court agreed to hear, Noel Canning v. NLRB, to decide a number of issues related to President Obama’s recess appointments to the National Labor Relations Board (NLRB) on January 4, 2012.

The Court also granted certiorari in UNITE HERE Local 355 v. Mulhall to decide—among other issues—whether an employer and union violate Section 302 of the Labor-Management Relations Act by entering into an agreement under which the employer provides a prohibited “thing of value” to a union by promising to remain neutral to union organizing.

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